Concentrated liquidity
CL
AMM design where LPs allocate liquidity to a chosen price range, increasing capital efficiency vs. constant-product.
Pioneered by Uniswap v3, concentrated liquidity is the dominant model for stablecoin-stablecoin swaps because near-1:1 ranges multiply effective depth by 100×+. Adopted by Curve (Tricrypto / NG), PancakeSwap v3, and Aerodrome Slipstream.
Related terms
- AMM (automated market maker)A smart contract that prices assets via a pricing curve over a pool of reserves rather than an order book.
- Liquidity poolA pool of token reserves that a smart contract uses to facilitate swaps, lending, or other on-chain activity.
- CurveThe largest stablecoin-focused AMM, optimised for low-slippage swaps between like-kind assets.
- Impermanent lossThe opportunity cost an LP incurs when pool composition rebalances toward the underperforming asset.